Nina's Furniture Store Has Had a Successful Year and Made

question 14

Multiple Choice

Nina's furniture store has had a successful year and made a significant profit. Which of the following actions using Nina's store profits would BEST increase productivity?

• A)Pay for utilities and inventory in advance.
• B)Develop a Web site that would enable customers to place orders online.
• C)Hire more staff.
• D)Create an emergency fund.

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Definitions:

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the company's leverage level.

Inventory Turnover in Days

A metric that calculates the number of days it takes for a company to sell through its entire inventory, indicating the efficiency of inventory management.

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with quick assets, excluding inventory.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations by comparing current assets to current liabilities.